10/25/2009 @ 9:13PM

Shattering The Movie Rental Window

Hoping to protect sales of new release DVDs, Hollywood studios are considering forcing rental companies like
Netflix
and
Blockbuster
to wait weeks or months before renting out new flicks. Currently, rental shops get movies at roughly the same time as big retailers like
Wal-Mart
and
Best Buy
. DVD sales dropped 9% to $14.5 billion last year.

Netflix CEO Reed Hastings says he’s unfazed by the development. During an analyst call following the DVD-by-mail outfit’s announcement that earnings grew 48% last quarter, Hastings said he though Netflix could negotiate huge discounts on the DVDs he eventually buys from the studios in exchange for honoring the window.

The New York Times Co.
, on the other hand, reported that digital sales fell 7.2%, suggesting that if marketers are in fact spending more on Web ads, they are looking first to traditional online marketing channels, like paid search ads and highly trafficked Web portals like Yahoo! before they turn to high-end online publishers like Nytimes.com.

What To Watch

Akamai
and
Level 3
, technology outfits that specialize in moving video and other data across the Web, both report earnings this week. Look to both for guidance on the cost for distributing video, an integral variable in the evolving business models of Hulu and YouTube.

New AOL executive Timothy Armstrong hinted at a conference last week that he was getting close to unveiling a massive strategic overhaul of the company’s content and advertising businesses. The company, which controls one of the largest brokers of Web ads, has been snapping up journalists to staff its network of content properties, such as its Daily Finance business site and its Boombox hip-hop blog. Watch for Armstrong to trickle out at least some news, lest AOL be further overshadowed by the recent success of Google and Yahoo!